A Bit of Background on SBIR/STTR

Program Goals

The Small Business Programs, also known as America’s Seed Fund, are comprised of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs (You can find more info on the NIH SEED site). The goals of the programs are to:

For us, this means being able to seed companies when a project is too risky for private investors. We look for companies that will develop a product or service that will help address substance use disorder by having a clear value proposition and commercial opportunity. More importantly, we are looking for companies that will not only translate an idea into a product but bring it to the end-user and scale for a large impact.


There are a few critical differences between the SBIR and STTR regarding whether partnerships with a non-profit research institution are allowed (SBIR) or required (STTR). The grant is always awarded to the small business. 

  Small Business Innovation Research (SBIR) Small Business Technology Transfer (STTR)
Percent of R&D budget 3.2% 0.45%
Partnerships Research partnerships are allowed Partnership with a non-profit research institution is required (e.g., university)
Work Requirement Small businesses may outsource:
  • 33% of Phase I research
  • 50% of Phase II research
Minimum work requirements:
  • 40% by small business
  • 30% by research institution partner

The remaining work may be done by either or outsourced

Principal Investigator (PI) Primary employment (> 50%) must be with the small business PI must be employed by either the partnering research institution or small business

Small Business Program Phases at NIDA

Below is an overview of application types within NIDA’s Small Business Programs that fund research and provide commercialization support. Which path you choose depends on the amount of preliminary research and technology development you have done in advance of applying to NIH. Reach out to program staff (Request a Technical Meeting) to discuss which path is right for your small business.

Small Business Program Phases Description
Phase I A Phase I award helps you focus on the feasibility, technical merit, and commercial potential of your research project.
Phase II A Phase II award lets you continue the research and development efforts initiated in Phase I. Once you’ve reached your Phase I milestones, you can apply for a Phase II award, even before the end of the Phase II award. You may submit your application for a Phase II award up to six receipt dates after your Phase I budget period expires.
Fast-Track The fast-track process allows you to submit both Phase I and Phase II in one application for review. The Fast-Track mechanism can minimize the funding gap between phases but requires a fully developed Phase II application/plan at the time of submission.
Direct to Phase II (SBIR Only) If your project has already demonstrated feasibility but you have not received a Phase I SBIR or STTR, you can apply for a Direct to Phase II award and bypass Phase I.


Step 2: Request a Technical Meeting
Schedule a meeting with a Program Officer to discuss your product idea and get help in understanding the grant process.